Dennis E. Lyons v. Newport News Shipbuilding and Dry Dock Company

• Court: Court of Appeals of Virginia
• Decided: December 28, 2005
• Docket: 0304051
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Elder, Clements and Haley Argued at Chesapeake, Virginia

DENNIS E. LYONS MEMORANDUM OPINION* BY v. Record No. 0304-05-1 JUDGE LARRY G. ELDER DECEMBER 28, 2005 NEWPORT NEWS SHIPBUILDING AND DRY DOCK COMPANY

FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION

Matthew D. Meadows (Richard B. Donaldson, Jr.; Jones, Blechman, Woltz & Kelly, P.C., on brief), for appellant.

Jonathan H. Walker (Mason, Mason, Walker & Hedrick, P.C., on brief), for appellee.

Dennis E. Lyons (claimant) appeals from a decision of the Workers’ Compensation

Commission awarding Newport News Shipbuilding and Dry Dock Company (employer) a credit

under the Virginia Workers’ Compensation Act (the Act) for benefits it paid to him pursuant to a

federal workers’ compensation statute. On appeal, claimant contends the Act permits a credit

only for periods of time during which compensation benefits were actually paid and that, because

no state award was ever issued to run concurrently with the relevant federal payments, employer

was not entitled to credit for the payments it made pursuant to the federal statute. We hold as a

matter of law under the facts of this case that a de facto award existed under the Act for the

period of time during which employer paid benefits under the federal statute. Employer was

entitled to a credit for the federal payments it made as against the de facto state award, and we

need not consider what result would obtain if no state award had been entered to run

* Pursuant to Code § 17.1-413, this opinion is not designated for publication. concurrently with the period of disability for which the federal payments were made. Thus, we

affirm the portion of the commission’s decision holding employer was entitled to a credit but

vacate the portion of the commission’s decision allocating that credit to the subsequent rather

than concurrent period of disability, and we remand for further proceedings consistent with this

opinion.

I.

On April 20, 1998, claimant sustained a compensable injury to his right elbow while

performing sandblasting work for employer. Employer accepted the injury as compensable and

paid temporary total disability benefits pursuant to the Act from April 28, 1998, through

September 15, 1998. On November 9, 1998, the parties filed a Memorandum of Agreement and

Agreed Statement of Fact reflecting those payments. The commission then entered an award for

that period of disability, indicating that, “Benefits having been paid, this award is for record

purposes only.”

Claimant was released to return to work on September 16, 1998, but again became

temporarily and totally disabled on October 28, 1998, as a result of shoulder surgery apparently

necessitated by the compensable injury. By letter filed December 8, 1998, claimant notified the

commission of this disability. Claimant asked that employer provide an appropriate

Supplemental Memorandum of Agreement to reflect that fact and said that, if such an agreement

was not forthcoming, he would request a hearing.1 The commission then sent employer its

standard form asking for employer’s position on claimant’s request for a resumption of

temporary total disability benefits. Employer checked the line indicating that the “claim is

accepted as compensable” and noted that “claimant is currently being paid under [the federal

1 Although claimant did not request a hearing, the commission apparently scheduled one for May 3, 1999. By the time of the hearing, a different dispute had developed between the parties, as discussed further in the text. -2- Longshore and Harbor Workers’ Compensation Act (LHWCA), 33 U.S.C. §§ 901 to 950].”

Employer paid pursuant to the LHWCA from October 28, 1998, through March 21, 1999, but

neither party took additional steps to seek entry of an award pursuant to the State Act for this

period of time.

Effective March 21, 1999, employer ceased making temporary total disability payments

pursuant to the LHWCA and resumed payments pursuant to the State Act. The parties submitted

a Supplemental Memorandum of Agreement showing employer resumed payment of temporary

total disability benefits under the State Act on March 22, 1999, and on May 25, 1999, the

commission entered an award reflecting that resumption. Claimant received temporary total

disability benefits pursuant to the State Act through May 25, 2002. The temporary total

disability award was terminated as of that date. Thereafter, the commission awarded claimant

temporary partial disability compensation from that date forward based on his return to work for

a different employer at a rate lower than his pre-injury average weekly wage. At that time,

employer began to pay temporary partial disability benefits but paid at a reduced rate based on its

position that it was entitled to a credit for the total dollar amount of temporary total disability

benefits paid pursuant to the LHWCA between October 28, 1998, and March 21, 1999, for which

period of time no state award was ever entered. Claimant sought an order directing employer to

comply with the temporary partial disability award and for an award of penalties based on what

he contended were employer’s underpayments of those benefits.

The deputy commissioner ruled the employer’s credit claim was barred by res judicata

based on a prior claim for credit that had been denied. He held in the alternative that, even if res

judicata did not bar the claim, the credit provisions of Code § 65.2-520 did not apply. He relied

on the language of the statute, which allows credit for “[a]ny payments made by the employer to

the injured employer during the period of his disability . . . which by the terms of this title were

-3- not due and payable when made.” He ruled that because claimant made no claim for disability

under the Act for the period between October 28, 1998, and March 21, 1999, and because

employer presented no evidence that claimant was disabled under the Act during that period,

employer was not entitled to the requested credit. He reasoned that “[i]f the claimant were

disabled during that period under the Virginia act, then an award would be appropriate for that

period and the employer would be credited for payments already made for that time period.”

The deputy held “that is not the case” and “that § 65.2-520 is not applicable.”

On request for review, the commission unanimously ruled that res judicata did not bar

employer’s credit request and that employer would be allowed the dollar-for-dollar credit it

sought. In granting employer’s request for a credit, it reasoned as follows:

[E]mployer seeks a dollar-for-dollar credit for payments made under the LHWCA from October 28, 1998, through March 21, 1999. To date, the claimant has not received an Award under the State Act for this period. The employer seeks a credit for the money it paid under the LHWCA, about $9,000, and to apply that credit against the October 25, 2002, award for temporary partial benefits.

This decision is controlled by Moore v. Virginia International Terminals, Inc., 254 Va. 46, 486 S.E.2d 528 (1997). In Moore, the Supreme Court affirmed the Court of Appeals holding that Virginia Code § 65.2-520 allows an employer to recover a dollar-for-dollar credit for the amount paid under the LHWCA that exceeded its obligation owed under the State Act. Therefore, the employer is entitled to a credit against the State award and subject to the 25% limitation of Virginia Code § 65.2-520.

Claimant noted this appeal.

II.

On appeal of the commission’s decision, claimant contends that any credit to which

employer was entitled pursuant to Code § 65.2-520 was limited to those periods of time during

which claimant received concurrent disability payments pursuant to both the State Act and some

-4- other source. We hold as a matter of law under the facts of this case that a de facto award existed

under the State Act for the period of time during which employer paid benefits under the

LHWCA. Employer was entitled to a credit for the payments it made under the LHWCA as

against the de facto state award, and we need not consider what result would obtain if no state

award had been entered to run concurrently with the period of disability for which the LHWCA

payments were made.

Code § 65.2-520 provides as follows:

§ 65.2-520. Voluntary payment by employer

Any payments made by the employer to the injured employee during the period of his disability, or to his dependents, which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation provided that, in the case of disability, such deductions shall be made by reducing the amount of the weekly payment in an amount not to exceed one-fourth of the amount of the weekly payment for as long as is necessary for the employer to recover his voluntary payment.

It is well established that “disability payments [an] employer pa[ys a] claimant under the

LHWCA [are] ‘voluntary’ [where] . . . they were not ‘due and payable under ‘the terms of’ the

Virginia Act [when paid].” Va. Int’l Terms., Inc. v. Moore, 22 Va. App. 396, 405, 470 S.E.2d

574, 578 (1996), aff’d, 254 Va. 46, 486 S.E.2d 528 (1997); see Newport News Shipbuilding &

Dry Dock Co. v. Holmes, 37 Va. App. 188, 191-92, 555 S.E.2d 419, 421 (2001). Although “an

injured worker may proceed under either or both statutes,” he “is entitled to only a single

recovery for his injuries.” Moore, 254 Va. at 49, 486 S.E.2d at 529. “‘[D]ouble recovery under

concurrent jurisdiction will not be allowed,’” id. (quoting American Foods v. Ford, 221 Va. 557,

561, 272 S.E.2d 187, 190 (1980)), because “‘employers’ awards under one compensation scheme

would be credited against any recovery under the second scheme,’” id. (quoting Sun Ship, Inc. v.

-5- Pennsylvania, 447 U.S. 715, 725 n.8, 100 S. Ct. 2432, 2439 n.8, 65 L. Ed. 2d 458, 466 n.8

(1980)).

It is well settled that “[t]he [Act] encourages the voluntary settlement of claims arising

from compensable injuries” and that “when agreements as to settlements are reached they must

be memorialized in a memorandum of agreement filed with the commission.” Nat’l Linen Serv.

v. McGuinn, 5 Va. App. 265, 268, 362 S.E.2d 187, 188-89 (1987) (en banc) (interpreting former

Code §§ 65.1-45 and -93, predecessors to present Code § 65.2-701). It is equally well settled

that

where the employer has stipulated to the compensability of the claim, has made payments to the employee for some significant period of time without filing a memorandum of agreement, and fails to contest the compensability of the injury[, the period of disability, or the compensation rate], it is “reasonable to infer that the parties ha[ve] reached an agreement as to the payment of compensation,” and a de facto award will be recognized.

Ryan’s Family Steak Houses, Inc. v. Gowan, 32 Va. App. 459, 463, 528 S.E.2d 720, 722 (2000)

(noting that General Assembly recodified and then revised applicable statute after decision in

McGuinn and neither rejected nor modified our interpretation of statute in McGuinn) (quoting

McGuinn, 5 Va. App. at 269-70, 362 S.E.2d at 189); see Watts v. P & J Hauling, Inc., 41

Va. App. 278, 285-86, 584 S.E.2d 457, 461 (2003) (holding commission did not err in finding no

de facto award where employer paid compensation but disagreement existed over amount of

average weekly wage). “Whether an agreement between the parties pertains to an initial award

or a supplemental award following a change of condition, the employer is still obligated to file a

memorandum of agreement with the commission.” Henrico Public Utils. v. Taylor, 34 Va. App.

233, 239, 540 S.E.2d 501, 505 (2001).

Here, employer conceded the compensability of claimant’s disability under the State Act

for the period of October 28, 1998, to March 21, 1999, and it did so in a writing filed with the

-6- commission. However, it never submitted a memorandum of agreement for the relevant period

as required by our case law. On these undisputed facts, we hold that a de facto award existed.

Thus, under Code § 65.2-520, employer was entitled under the facts of this case to a credit for

benefits it paid pursuant to the LHWCA for the period of October 28, 1998, to March 21, 1999,

as against the de facto state award covering the same period of time. Because employer’s credit

was exhausted by the obligation due under the concurrent de facto state award, a scenario

contemplated by the commission in a hypothetical,2 we need not consider what result would

obtain if no state award had been entered to run concurrently with the period for which LHWCA

III.

For these reasons, we affirm the commission’s decision that employer was entitled to a

credit but vacate the portion of the commission’s decision allocating that credit to the subsequent

rather than concurrent period of disability, and we remand for further proceedings consistent

with this opinion.

Affirmed, in part, and vacated and remanded, in part.

2 Although the commission held no award had been entered, it included the following analysis in a footnote:

The employer would not be entitled to the credit if the claimant had received a State award for October 28, 1998, through March 21, 1999. Had the claimant received such an award, there would not have been any overpayment because the employer’s payments under the LHWCA would not have exceeded its State award obligation. -7-